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Investment Daily: US stocks rose ahead of CPI data and Fed policy decision

11 June 2024

Key takeaways

  • US stocks and Treasury yields rose ahead of CPI and Fed.
  • Rising political uncertainty pressured European markets.
  • Asian stocks were mixed.

Markets

US equities recorded modest gains on Monday as investors awaited the CPI inflation data and Fed policy decision due on Wednesday. The S&P 500 added 0.3%.  

US Treasuries edged lower (yields higher) after a soft 3-year Treasury debt auction result. 10-year yields rose 4bp to 4.47%.    

European stock markets started the week on a soft note as rising political uncertainty weighed on sentiment. The Euro Stoxx 50 fell 0.7%. Weakness was most evident in France’s CAC (-1.3%). In the UK, the FTSE-100 was down 0.2%.

European government bonds fell (yields rose) as investors digested the results of the latest EU parliamentary elections. 10-year German yields increased 5bp to 2.67%, as 10-year French yields jumped 13bp to 3.23%, the highest level since mid-November 2023. In the UK, 10-year gilt yields moved up by 6bp to 4.32% ahead of key UK labour market data.  

Asian stock markets were mixed on Monday. Japan’s Nikkei 225 increased 0.9%, led by financials, whereas India’s Sensex dipped 0.3% on lower IT stocks. Stock markets in China and Hong Kong were closed for a holiday.

Crude oil prices rallied on Monday as investors weighed the outlook for summer fuel demand and geopolitical risks on supply. WTI crude for July delivery advanced 2.9% to settle at USD77.7 a barrel.

Key Data Releases and Events

Yesterday

In the European parliamentary elections, the centre-right European People’s Party (EPP) maintained a majority despite gains from far-right parties in France and Germany. French president Macron surprisingly announced snap general elections. The elections will be held over two rounds: the first round is expected on 30 June, with the second round following on 7 July.

Releases due today (11 June 2024)

In the UK, the unemployment rate in the three months to April should be unchanged at 4.3%. Private sector underlying average earnings growth is expected to remain elevated, at 6.1% in the three months to April (3mths to March: 6.0%).

The US NFIB business confidence index is forecast to be unchanged in May at 89.7 amid continued high financing costs.

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